Toll Brothers, Inc. v. Chang Su-O Lin

MEMORANDUM **

Toll Brothers, Inc. (“Toll”) appeals from a judgment entered in the United States District Court for the Northern District of California following a bench trial in favor of Chang Su-0 Lin, Hong Lien Lin, and Hong Yao Lin (“the Lins”). The complaint, based on diversity of citizenship, arose out of a purchase and sale agreement (“PSA”) in which the Lins agreed to sell Toll — a national homebuilder — three *773 separate parcels of land in Dublin, California in three separate closings for a total sale price of $241,500,000. Toll deposited $21,785,000 into an escrow account to be paid out in increments with each property closing. Toll and the Lins successfully closed on two parcels of land, Sub-Areas 1 and 2. The disputed issue here involves the Sub-Area 3 closing scheduled for the later of June 30, 2007 or three days after all of the special and general closing conditions had been met.

The Lins had negotiated and executed a “temporary non-exclusive easement” to PG & E across Sub-Area 3 on December 12, 2005 for the construction of temporary overhead power lines for the purpose of carrying out other provisions of the PSA that are not relevant here. By September 2006 all…

dissenting:

In my view, Toll Brothers was justified in rescinding the purchase and sale agreement (“PSA”) due to the Lins’ material breach of granting the temporary indefinite easement to PG & E. Accordingly, I dissent.

Section 6.1 of the PSA sets forth two separate dates for closing: (1) the scheduled closing date (i.e., June 30, 2007); and (2) if the conditions for closing are not met by June 30, 2007, the actual closing date, which is three business days after all the closing conditions are eventually satisfied. However, I do not agree with the majority’s interpretation, that if the closing was not accomplished by June 30, 2007, § 6.1 automatically and unconditionally extended the closing date. If § 6.1 of the PSA is read as a self-executing clause which indefinitely extends closing until all of the closing conditions are met, even where a closing condition is in the hands of a third party, the PSA becomes illusory.

Section 6.1 established a specific closing date, June 30, 2007, but also provided that the scheduled closing date could be extended if either party anticipated that the closing conditions could not be met by the scheduled closing date and affirmatively invoked…

FILED

AUG 31 2011

NOT FOR PUBLICATION

MOLLY C. DWYER, CLERK

U.S . CO U RT OF AP PE A LS

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

TOLL BROTHERS, INC., a Delaware No. 09-16955 corporation, D.Ct. No. 08-cv-0987-SC Plaintiff-Counter-Defendant- Appellant,

MEMORANDUM *

v.

CHANG SU-O LIN; HONG LIEN LIN;

HONG YAO LIN, individuals,

Defendants-Counter- Claimants, Appellees.

Appeal from the United States District Court* for the Northern District of California Samuel Conti, District Judge, Presiding

Re-hearing and Submission July 13, 2011 San Francisco, California

Before: GOULD, CALLAHAN, Circuit Judges, and KORMAN, District Judge.** Toll Brothers, Inc. ('Toll') appeals from a judgment entered in the United

* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. ** The Honorable Edward R. Korman, Senior United States District Judge, Eastern District of New Yorµ, sitting by designation. States District Court for the Northern District of California following a bench trial in

favor of Chang Su-O Lin, Hong Lien Lin, and Hong Yao Lin ('the Lins'). The

complaint, based on…